The Czech Republic Government Debt Management Annual Report 2022
Ministry of Finance presents to the public, in accordance with the calendar of published information for the first half of 2023 planned within the Czech Republic Funding and Debt Management Strategy for 2023 published on 3 January 2023, the Czech Republic Government Debt Management Annual Report for 2022, which contains a detailed evaluation of the dynamics and structure of state debt, issuance activity of state and the secondary government bond market, the development of state budget interest expenditures, monitoring of debt portfolio risk management and the annual evaluation of primary dealers of Czech government bonds.
The absolute value of the state debt reached CZK 2,894.8 billion at the end of 2022, which represents 42.9% of GDP. This is a year-on-year increase of CZK 429.1 billion. This is mainly due to the coverage of the 2022 state budget deficit of CZK 360.4 billion and the operational preventive strengthening of available liquidity of the Czech koruna and euro treasury single account for the purpose of providing loans to producers operating on the energy market, in accordance with Czech Government Resolution No. 586 of 29 June 2022. At the end of 2022, these loans amounted to EUR 3 billion. The absolute value of the state debt adjusted for the funds procured for these loans thus reached CZK 2,822.5 billion, i.e. 41.8% of GDP.
The sales of CZK-denominated medium-term and long-term government bonds on the primary and secondary market amounted to CZK 431.3 billion. In 2022 three regular redemptions of CZK-denominated medium-term and long-term government bonds in total nominal value of CZK 145.4 billion were carried out and government bonds in total nominal value of CZK 8.1 billion maturing in 2023 have been bought back. The net issuance of CZK-denominated government bonds reached total nominal value of CZK 277.8 billion. In 2022, as part of the project of direct sale government bonds to citizens, two issues of the “Dluhopis Republiky” government bonds were sold in total amount of CZK 41.1 billion. In the form of reinvestment of the yield, government bonds in total nominal value of CZK 3.8 billion were issued. In 2022, redemptions before the set maturity date based on the exercise of holders' rights in total nominal value of CZK 0.4 billion were made. The net issuance of government bonds for citizens reached total nominal value of CZK 44.5 billion and their share in the state debt rose to 2.9%.
The average time to maturity of the total state debt amounted to 6.2 years at the end of 2022. In the case of the indicator of the average time to maturity after taking into account cash resources from short-term reserve operations on the money market, respectively taking into the total available state treasury liquidity against the nearest state debt redemptions, these values amounted to 6.5 years, respectively 7.4 years, which confirms the continuation of stable refinancing and liquidity position of the Czech Republic.
Net revenue from state treasury liquidity management operations amounted to CZK 22.1 billion in 2022, which is CZK 19.7 billion more than in the year 2021, when the increase in money market rates had a positive effect. The sum of state budget revenue from operations within the liquidity management of the state treasury, government bonds lending, and from borrowing operations with a negative yield reached CZK 22.6 billion in 2022. This was the highest amount of this type of state budget revenue in history, which is netted against realised interest expenditure on state debt service.
In 2022, all major rating agencies with the international scope of activity maintained the Czech Republic with the highest overall rating of all Central and Eastern European countries, which has also been above the average rating of euro area member countries for several years.